I am not an Illinois attorney … however it is generally known that title loans are a form of short-term lending where title loan companies target people who own their cars outright. The title loan company lends you money at huge interest rates (usually 200-300%) and gets the title to your car as "collateral." This means that if you don't pay off the loan they can take your car as payment. It is generally good advice to avoid taking out a title loan if possible. Most title loan companies use "balloon payments." A balloon payment is a very high payment that is due on the last month of the loan. For example, a $3000 auto title loan would require you to pay $400 each month for 7 months. Then you would have a $3000 balloon payment in the eighth month. If you can't pay the last payment (the balloon payment) the title loan company can repossess your car and sell it. Thus many title loans end up with the consumer losing their car. You should never agree to borrow money from a title lender unless you have a plan to make all the payments of the loan, including the balloon payment in the last month. You might want to check with Illinois Legal Aid at http://www.illinoislegalaid.org/index.cfm . Complaints against a title loan lender can be directed to the Illinois Department of Financial Institutions. Phone number: (312) 814-2000, T.D.D. (312) 814-7138
This Avvo "Answer" is provided for general informational purposes only and is not intended to be legal advice to you or others. The general information in this Avvo Answer is not a substitute for the advice of an competent attorney in your state or jurisdiction. The attorney client relationship is not established by this Avvo Answer.
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline